Why geography matters in business strategy?

In crafting business strategy firms & countries need to look at geography in a big way. There are two reasons for this. One is to maximize advantages and second is to minimise disadvantages. Here is a short review:

Before delving deep, let me give you some ideas of the vectors that have impact on business strategy. These are grouped into primary and secondary. The former group has politics, economics and military as poles used with an acronym (PEM) while the latter has society, technology and geography as poles carrying a shorthand (STG). In this blog we are concerned with geography only.

Here are seven factors that a strategist need to take into account about geography so that he understands what works and what does not:

1. Territorial limit is well defined. A country may have neighbours and borders that are inviolable in terms of law. Anything impinging either of these two has to be avoided at any cost.

2. Territorial integrity is sacrosanct in that a country is given assurance in law and equity that it cannot be subjected to invasion by alien force. Even though legally such assurance is stated in practise it would be fairly difficult to enforce unless the country has security and safety in-built to protect and defend outside interference.

3. It is the terrain that matters a lot. A country may have flat land, mountainous areas and waterways crisscrossing the entire extent of its area.

4. Natural resources available in the country arise from two sources. One is over-ground that relates to topography, soil, fertility, lakes, canals, waterways that besot the surface. Second is under-ground consisting inter alia oil, gas, UG water, minerals& metals and many more?

5. Climate of a country is well–research and documented. Understanding the prevailing climate at a particular time and changes that could occur during any span of time affects every aspect of economics as well as day to day life of the citizen. Yet another point is comprehensive knowledge and understating that helps managing climate change in short and long run.

6. Environment is bare essential in geography that shapes business strategy.

Protecting the environment and avoiding it being polluted are primary concerns of a strategist. When industrial revolution took place in the earliest centuries this factor was totally disregarded. But not anymore. Today people, firms and those who run the political establishment of a country are jointly responsible for the sustenance of good if not excellent environment around them.

7. Finally it is the ethos, the shared culture broadly influencing a country influences choices to be made in politics, economics and also in military affairs.

All these seven factors arising from the geography as one of the secondary poles are to be synthesised by those who are vested with the responsibility of formulating, executing and evaluating business strategy!

 

Cheers!

 

Muthu Ashraff Rajulu

Business Strategist

Mobile: + 94 777 265677

E-mail: cosmicgems@gmail.com

Blog:   Business Strategist